Attached files
file | filename |
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EXCEL - IDEA: XBRL DOCUMENT - Maiden Holdings, Ltd. | Financial_Report.xls |
EX-32.2 - EXHIBIT - Maiden Holdings, Ltd. | q22014-exhibit322.htm |
EX-32.1 - EXHIBIT - Maiden Holdings, Ltd. | q22014-exhibit321.htm |
EX-31.1 - EXHIBIT - Maiden Holdings, Ltd. | q22014exhibit-311.htm |
EX-31.2 - EXHIBIT - Maiden Holdings, Ltd. | q22014exhibit-312.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2014
¬ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________ to _________
Commission File No. 001-34042
MAIDEN HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)
Bermuda (State or other jurisdiction of incorporation or organization) | 98-0570192 (IRS Employer Identification No.) |
131 Front Street, Hamilton, Bermuda (Address of principal executive offices) | HM12 (Zip Code) |
(441) 298-4900
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¬
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¬
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¬ | Accelerated filer x | |
Non-accelerated filer ¬ (Do not check if a smaller reporting company) | Smaller reporting company ¬ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act). Yes ¬ No x
As of August 4, 2014, the number of the Registrant's Common Stock ($.01 par value) outstanding was 72,877,657.
INDEX
Page | ||
PART I - Financial Information | ||
PART II - Other Information | ||
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MAIDEN HOLDINGS, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars, except share and per share data)
June 30, 2014 (Unaudited) | December 31, 2013 (Audited) | ||||||
ASSETS | |||||||
Investments: | |||||||
Fixed maturities, available-for-sale, at fair value (Amortized cost 2014: $3,099,723; 2013: $3,127,792) | $ | 3,225,676 | $ | 3,162,067 | |||
Other investments, at fair value (Cost 2014: $10,438; 2013: $4,522) | 11,061 | 5,092 | |||||
Total investments | 3,236,737 | 3,167,159 | |||||
Cash and cash equivalents | 70,017 | 139,833 | |||||
Restricted cash and cash equivalents | 221,545 | 77,360 | |||||
Accrued investment income | 26,354 | 25,238 | |||||
Reinsurance balances receivable, net (includes $371,691 and $299,645 from related parties in 2014 and 2013, respectively) | 672,526 | 560,145 | |||||
Prepaid reinsurance premiums | 29,378 | 39,186 | |||||
Reinsurance recoverable on unpaid losses (includes $5,983 and $7,263 from related parties in 2014 and 2013, respectively) | 100,199 | 84,036 | |||||
Loan to related party | 167,975 | 167,975 | |||||
Deferred commission and other acquisition expenses (includes $261,168 and $216,508 from related parties in 2014 and 2013, respectively) | 360,179 | 304,908 | |||||
Goodwill and intangible assets, net | 88,975 | 90,613 | |||||
Other assets | 46,921 | 56,926 | |||||
Total assets | $ | 5,020,806 | $ | 4,713,379 | |||
LIABILITIES | |||||||
Reserve for loss and loss adjustment expenses (includes $1,004,489 and $885,381 from related parties in 2014 and 2013, respectively) | $ | 2,104,660 | $ | 1,957,835 | |||
Unearned premiums (includes $849,231 and $711,950 from related parties in 2014 and 2013, respectively) | 1,224,830 | 1,034,754 | |||||
Accrued expenses and other liabilities | 107,905 | 110,114 | |||||
Senior notes | 360,000 | 360,000 | |||||
Junior subordinated debt | — | 126,381 | |||||
Total liabilities | 3,797,395 | 3,589,084 | |||||
Commitments and Contingencies | |||||||
EQUITY | |||||||
Preference shares | 315,000 | 315,000 | |||||
Common shares ($0.01 par value; 73,845,844 and 73,595,897 shares issued in 2014 and 2013, respectively; 72,877,657,and 72,633,561 shares outstanding in 2014 and 2013, respectively) | 738 | 736 | |||||
Additional paid-in capital | 575,811 | 574,522 | |||||
Accumulated other comprehensive income | 117,950 | 25,784 | |||||
Retained earnings | 217,295 | 211,602 | |||||
Treasury shares, at cost (968,187 and 962,336 shares in 2014 and 2013, respectively) | (3,867 | ) | (3,801 | ) | |||
Total Maiden shareholders’ equity | 1,222,927 | 1,123,843 | |||||
Noncontrolling interest in subsidiaries | 484 | 452 | |||||
Total equity | 1,223,411 | 1,124,295 | |||||
Total liabilities and equity | $ | 5,020,806 | $ | 4,713,379 |
See accompanying notes to the unaudited Condensed Consolidated Financial Statements.
3
MAIDEN HOLDINGS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands of U.S. dollars, except per share data)
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenues: | ||||||||||||||||
Gross premiums written | $ | 560,008 | $ | 535,457 | $ | 1,282,390 | $ | 1,250,177 | ||||||||
Net premiums written | $ | 540,920 | $ | 497,949 | $ | 1,250,812 | $ | 1,187,008 | ||||||||
Change in unearned premiums | (9,024 | ) | 15,324 | (199,686 | ) | (185,293 | ) | |||||||||
Net premiums earned | 531,896 | 513,273 | 1,051,126 | 1,001,715 | ||||||||||||
Other insurance revenue | 2,842 | 2,780 | 8,004 | 7,995 | ||||||||||||
Net investment income | 28,107 | 20,745 | 55,949 | 42,724 | ||||||||||||
Net realized gains (losses) on investment | 577 | (53 | ) | 665 | 3,230 | |||||||||||
Total revenues | 563,422 | 536,745 | 1,115,744 | 1,055,664 | ||||||||||||
Expenses: | ||||||||||||||||
Net loss and loss adjustment expenses | 351,157 | 343,347 | 702,501 | 678,242 | ||||||||||||
Commission and other acquisition expenses | 157,402 | 143,572 | 303,484 | 275,902 | ||||||||||||
General and administrative expenses | 15,396 | 16,817 | 30,320 | 30,912 | ||||||||||||
Interest and amortization expenses | 7,172 | 9,570 | 15,236 | 19,140 | ||||||||||||
Accelerated amortization of junior subordinated debt discount and issuance cost | — | — | 28,240 | — | ||||||||||||
Amortization of intangible assets | 819 | 945 | 1,638 | 1,890 | ||||||||||||
Foreign exchange and other gains | (934 | ) | (1,049 | ) | (1,072 | ) | (2,596 | ) | ||||||||
Total expenses | 531,012 | 513,202 | 1,080,347 | 1,003,490 | ||||||||||||
Income before income taxes | 32,410 | 23,543 | 35,397 | 52,174 | ||||||||||||
Income tax expense | 495 | 212 | 1,421 | 736 | ||||||||||||
Net income | 31,915 | 23,331 | 33,976 | 51,438 | ||||||||||||
Less: Income attributable to noncontrolling interest | (27 | ) | (32 | ) | (66 | ) | (59 | ) | ||||||||
Net income attributable to Maiden shareholders | 31,888 | 23,299 | 33,910 | 51,379 | ||||||||||||
Dividends on preference shares | (6,084 | ) | (3,094 | ) | (12,168 | ) | (6,188 | ) | ||||||||
Net income attributable to Maiden common shareholders | $ | 25,804 | $ | 20,205 | $ | 21,742 | $ | 45,191 | ||||||||
Basic earnings per share attributable to Maiden common shareholders | $ | 0.35 | $ | 0.28 | $ | 0.30 | $ | 0.62 | ||||||||
Diluted earnings per share attributable to Maiden common shareholders | $ | 0.34 | $ | 0.27 | $ | 0.29 | $ | 0.61 | ||||||||
Dividends declared per common share | $ | 0.11 | $ | 0.09 | $ | 0.22 | $ | 0.18 |
See accompanying notes to the unaudited Condensed Consolidated Financial Statements.
4
MAIDEN HOLDINGS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
(in thousands of U.S. dollars)
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Comprehensive income: | ||||||||||||||||
Net income | $ | 31,915 | $ | 23,331 | $ | 33,976 | $ | 51,438 | ||||||||
Other comprehensive income (loss) | ||||||||||||||||
Net unrealized holding gains (losses) on available-for-sale fixed maturities arising during the period (net of tax of $(14) and $(43) for the three and six months ended June 30, 2014 and $26 and $33 for the three and six months ended June 30, 2013, respectively) | 53,308 | (83,489 | ) | 91,339 | (91,337 | ) | ||||||||||
Adjustment for reclassification of net realized gains recognized in net income, net of tax | 418 | — | 347 | (3,081 | ) | |||||||||||
Foreign currency translation adjustment | 643 | (1,569 | ) | 477 | 1,317 | |||||||||||
Other comprehensive income (loss) | 54,369 | (85,058 | ) | 92,163 | (93,101 | ) | ||||||||||
Comprehensive income (loss) | 86,284 | (61,727 | ) | 126,139 | (41,663 | ) | ||||||||||
Net income attributable to noncontrolling interest | (27 | ) | (32 | ) | (66 | ) | (59 | ) | ||||||||
Other comprehensive loss (income) attributable to noncontrolling interest | 3 | (5 | ) | 3 | 6 | |||||||||||
Comprehensive income attributable to noncontrolling interest | (24 | ) | (37 | ) | (63 | ) | (53 | ) | ||||||||
Comprehensive income (loss) attributable to Maiden shareholders | $ | 86,260 | $ | (61,764 | ) | $ | 126,076 | $ | (41,716 | ) |
See accompanying notes to the unaudited Condensed Consolidated Financial Statements.
5
MAIDEN HOLDINGS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
(in thousands of U.S. dollars)
For the Six Months Ended June 30, | 2014 | 2013 | ||||||
Preference shares | ||||||||
Beginning balance | $ | 315,000 | $ | 150,000 | ||||
Ending balance | 315,000 | 150,000 | ||||||
Common shares | ||||||||
Beginning balance | 736 | 733 | ||||||
Exercise of options and issuance of shares | 2 | 2 | ||||||
Ending balance | 738 | 735 | ||||||
Additional paid-in capital | ||||||||
Beginning balance | 574,522 | 575,869 | ||||||
Exercise of options and issuance of common shares | 324 | 931 | ||||||
Share based compensation expense | 965 | 1,160 | ||||||
Ending balance | 575,811 | 577,960 | ||||||
Accumulated other comprehensive income | ||||||||
Beginning balance | 25,784 | 141,130 | ||||||
Change in net unrealized gains (losses) on investments, net | 91,686 | (94,418 | ) | |||||
Foreign currency translation adjustments | 480 | 1,323 | ||||||
Ending balance | 117,950 | 48,035 | ||||||
Retained earnings | ||||||||
Beginning balance | 211,602 | 151,308 | ||||||
Net income attributable to Maiden shareholders | 33,910 | 51,379 | ||||||
Dividends on preference shares | (12,168 | ) | (6,188 | ) | ||||
Dividends on common shares | (16,049 | ) | (13,063 | ) | ||||
Ending balance | 217,295 | 183,436 | ||||||
Treasury shares | ||||||||
Beginning balance | (3,801 | ) | (3,801 | ) | ||||
Shares repurchased for treasury | (66 | ) | — | |||||
Ending balance | (3,867 | ) | (3,801 | ) | ||||
Noncontrolling interest in subsidiaries | ||||||||
Beginning balance | 452 | 372 | ||||||
Dividend paid to noncontrolling interest | (31 | ) | (29 | ) | ||||
Net income attributable to noncontrolling interest | 66 | 59 | ||||||
Foreign currency translation adjustments | (3 | ) | (6 | ) | ||||
Ending balance | 484 | 396 | ||||||
Total equity | $ | 1,223,411 | $ | 956,761 |
See accompanying notes to the unaudited Condensed Consolidated Financial Statements.
6
MAIDEN HOLDINGS, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands of U.S. dollars)
For the Six Months Ended June 30, | 2014 | 2013 | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 33,976 | $ | 51,438 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization of intangibles | 2,392 | 2,591 | ||||||
Net realized gains on investment | (665 | ) | (3,230 | ) | ||||
Foreign exchange and other gains | (1,072 | ) | (2,596 | ) | ||||
Amortization of share-based compensation expense, bond premium and discount, subordinated debt discount and accelerated amortization of junior subordinated debt discount and issuance cost, net | 32,583 | 8,230 | ||||||
Changes in assets – (increase) decrease: | ||||||||
Reinsurance balances receivable, net | (110,604 | ) | (167,309 | ) | ||||
Prepaid reinsurance premiums | 9,808 | (10,219 | ) | |||||
Reinsurance recoverable on unpaid losses | (16,093 | ) | 9,712 | |||||
Accrued investment income | (1,113 | ) | (540 | ) | ||||
Deferred commission and other acquisition expenses | (55,090 | ) | (44,644 | ) | ||||
Other assets | 7,200 | 7,772 | ||||||
Changes in liabilities – increase (decrease): | ||||||||
Reserve for loss and loss adjustment expenses | 145,959 | 111,408 | ||||||
Unearned premiums | 189,872 | 195,538 | ||||||
Accrued expenses and other liabilities | (1,630 | ) | (8,091 | ) | ||||
Net cash provided by operating activities | 235,523 | 150,060 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of fixed maturities – available-for-sale | (217,904 | ) | (630,576 | ) | ||||
Purchases of other investments | (6,134 | ) | (1,538 | ) | ||||
Proceeds from sales of fixed maturities – available-for-sale | 109,963 | 202,486 | ||||||
Proceeds from maturities and calls of fixed maturities | 133,006 | 264,264 | ||||||
Proceeds from redemption of other investments | 510 | 168 | ||||||
(Increase) decrease in restricted cash and cash equivalents | (144,185 | ) | 36,112 | |||||
Other, net | (656 | ) | 1,055 | |||||
Net cash used in investing activities | (125,400 | ) | (128,029 | ) | ||||
Cash flows from financing activities: | ||||||||
Repayment of junior subordinated debt | (152,500 | ) | — | |||||
Common share issuance | 326 | 933 | ||||||
Dividends paid to common shareholders | (16,035 | ) | (6,543 | ) | ||||
Dividends paid to preference shareholders | (12,168 | ) | (6,188 | ) | ||||
Net cash used in financing activities | (180,377 | ) | (11,798 | ) | ||||
Effect of exchange rate changes on foreign currency cash | 438 | (2,401 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (69,816 | ) | 7,832 | |||||
Cash and cash equivalents, beginning of period | 139,833 | 81,543 | ||||||
Cash and cash equivalents, end of period | $ | 70,017 | $ | 89,375 |
See accompanying notes to the unaudited Condensed Consolidated Financial Statements.
7
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)
1. Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Maiden Holdings, Ltd. and its subsidiaries (the "Company" or "Maiden") and have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP" or "U.S. GAAP") for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All significant inter-company transactions and accounts have been eliminated.
These interim unaudited Condensed Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim period and all such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative, if annualized, of those to be expected for the full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
These unaudited Condensed Consolidated Financial Statements, including these notes, should be read in conjunction with the Company's audited consolidated financial statements, and related notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013.
Certain reclassifications have been made for 2013 to conform to the 2014 presentation and have no impact on net income previously reported.
2. Significant Accounting Policies
There have been no material changes to our significant accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2013, except as discussed below:
Recently Adopted Accounting Standards Updates
Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry-forward, a Similar Tax Loss, or a Tax Credit Carry-forward Exists
On July 18, 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-11 which provides guidance on the presentation of an unrecognized tax benefit when a net operating loss ("NOL") carry-forward, a similar tax loss, or a tax credit carry-forward exists. Under this ASU, an entity must present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a NOL carry-forward, similar tax loss, or a tax credit carry-forward. There are two exceptions to this form of presentation as follows:
• | To the extent a NOL carry-forward, a similar tax loss, or a tax credit carry-forward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position; and |
• | The entity does not intend to use the deferred tax asset for this purpose. |
If either of these conditions exists, an entity should present an unrecognized benefit in the financial statements as a liability and should not net the unrecognizable tax benefit with a deferred tax asset.
The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The update was adopted effective January 1, 2014. The adoption of this guidance did not have an impact on our results of operations, financial condition or liquidity.
8
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)
2. Significant Accounting Policies (continued)
Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity
In March 2013, FASB issued ASU 2013-05 with the objective of resolving the diversity about whether Accounting Standards Codification ("ASC") 810-10, Consolidation - Overall, or ASC 830-30, Foreign Currency Matters - Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. Under this guidance, when a reporting entity that is also the parent entity, ceases to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity, the parent is required to apply the guidance in ASC 830-30 to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. Additionally, for an equity method investment that is a foreign entity, the partial sale guidance in ASC 830-30-40 continues to be applicable. As such, a pro rata portion of the cumulative translation adjustment should be released into net income upon a partial sale of such an equity method investment. However, this treatment does not apply to an equity method investment that is not a foreign entity. In those instances, the cumulative translation adjustment is released into net income only if the partial sale represents a complete or substantially complete liquidation of the foreign entity that contains the equity method investment.
Furthermore, the amendments in this ASU clarify that the sale of an investment in a foreign entity includes both: (1) events that result in the loss of a controlling financial interest in a foreign entity (that is, irrespective of any retained investment); and (2) events that result in an acquirer obtaining control of an acquiree in which it held an equity interest immediately before the acquisition date (sometimes also referred to as a step acquisition). Accordingly, the cumulative translation adjustment should be released into net income upon the occurrence of those events.
The amendments in this ASU are effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The update was adopted effective January 1, 2014. The adoption of this guidance did not have an impact on our results of operations, financial condition or liquidity.
Recently Issued Accounting Standards Not Yet Adopted
Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity
On April 10, 2014, the FASB issued ASU 2014-08, which amends the definition of a discontinued operation in ASC 205-20 and requires entities to provide additional disclosures about disposal transactions that both meet and do not meet the discontinued-operations criteria. Under the previous guidance, the results of operations of a component of an entity were classified as a discontinued operation if all of the following conditions were met:
• | The component has been disposed of or is classified as held for sale; |
• | The operations and cash flows of the component have been (or will be) eliminated from the ongoing operations of the entity as a result of the disposal transaction; and |
• | The entity will not have any significant continuing involvement in the operations of the component after the disposal transaction. |
The revised guidance will change how entities identify disposal transactions under U.S. GAAP by eliminating the second and third criteria above for classifying operations as discontinued. The new guidance instead requires classification of a component or group of components as discontinued operations if it represents a strategic shift that has or will have a major impact on an entity’s operations or financial results.
The amendments in this ASU are effective prospectively to all disposals (or classifications as held for sale) that occur in annual periods (and interim periods therein) beginning on or after December 15, 2014. Early adoption is permitted. Entities are prohibited from applying the new ASU to any component that is classified as held for sale before the adoption date. The Company is currently evaluating the impact of the adoption of this new guidance on its consolidated results of operations and financial condition.
9
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)
2. Significant Accounting Policies (continued)
Revenue from Contracts with Customers
On May 28, 2014, FASB issued the final standard on revenue from contracts with customers. The standard, issued as ASU 2014-09, provides comprehensive guidance for entities to use in accounting for revenue arising from contracts with customers. The purpose of this ASU is to develop a common revenue recognition standard as part of the convergence between U.S. GAAP and International Financial Reporting Standard ("IFRS"). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The ASU is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016, for public entities. Early application is not permitted.
An entity should apply the amendments in this ASU using one of the following two methods on adoption:
1. | Retrospectively to each prior reporting period presented and the entity may elect any of the following practical expedients: |
a. | For completed contracts, an entity need not restate contracts that begin and end within the same annual reporting period; |
b. | For completed contracts that have variable consideration, an entity may use the transaction price at the date the contract was completed rather than estimating variable consideration amounts in the comparative reporting periods; |
c. | For all reporting periods presented before the date of initial application, an entity need not disclose the amount of the transaction price allocated to remaining performance obligations and an explanation of when the entity expects to recognize that amount as revenue. |
2. | Retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. If an entity elects this transition method it also should provide the additional disclosures in reporting periods that include the date of initial application of: |
a. | The amount by which each financial statement line item is affected in the current reporting period by the application of this ASU as compared to the guidance that was in effect before the change. |
b. | An explanation of the reasons for significant changes. |
The Company is currently evaluating the impact of the adoption of this new guidance on its consolidated results of operations and financial condition and have not yet determined the method by which we will adopt the standard in 2017.
Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period
On June 19, 2014, FASB issued ASU 2014-12 to clarify how entities should treat performance targets that can be met after the requisite service period of a share-based payment award. The ASU states that the share-based payment award should be treated as a performance condition that affects vesting and therefore, an entity would not record compensation expense (measured as of the grant date without taking into account the effect of the performance target) related to an award for which transfer to the employee is contingent on the entity’s satisfaction of a performance target until it becomes probable that the performance target will be met. No new disclosures are required under the ASU.
ASU 2014-12 is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2015. Early adoption is permitted. In addition, all entities will have the option of applying the guidance either prospectively (i.e. only to awards granted or modified on or after the effective date of the issue) or retrospectively. Retrospective application would only apply to awards with performance targets outstanding at or after the beginning of the first annual period presented (i.e. the earliest presented comparative period). The adoption of this guidance is not expected to have an impact on our results of operations, financial condition or liquidity.
10
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)
3. Segment Reporting
The Company currently has three reportable segments: Diversified Reinsurance, AmTrust Quota Share Reinsurance and the NGHC Quota Share (which is currently in run-off).
The Company evaluates segment performance based on segment profit separately from the results of our investment portfolio. Other operating expenses allocated to the segments are called General and Administrative expenses which are allocated on an actual basis except salaries and benefits where management’s judgment is applied. The Company does not allocate general corporate expenses to the segments. In determining total assets by reportable segment, the Company identifies those assets that are attributable to a particular segment such as reinsurance balances receivable, prepaid reinsurance premiums, reinsurance recoverable on unpaid losses, deferred commission and other acquisition expenses, loans, goodwill and intangible assets, restricted cash and cash equivalents and investments, and reinsurance recoverable on paid losses and funds withheld (which are both presented as part of other assets in the condensed consolidated balance sheets). All remaining assets are allocated to Corporate.
Fee-generating business, which is included in the Diversified Reinsurance segment, is considered part of the underwriting operations of the Company. To the extent that the fees are generated on underlying insurance contracts sold to third parties that are then ceded under quota share reinsurance contracts with Maiden Reinsurance Ltd. ("Maiden Bermuda", formerly known as Maiden Insurance Company Ltd.), a proportionate share of the fee is offset against the related acquisition expense. To the extent that fee business is not directly associated with premium revenue generated under the applicable reinsurance contracts, that fee revenue is separately reported on the line captioned “Other insurance revenue” in the Company's unaudited Condensed Consolidated Statements of Income.
The following tables summarize our operating segment's underwriting results and the reconciliation of our reportable segments to net income:
For the Three Months Ended June 30, 2014 | Diversified Reinsurance | AmTrust Quota Share Reinsurance | NGHC Quota Share | Total | ||||||||||||
Net premiums written | $ | 168,943 | $ | 372,024 | $ | (47 | ) | $ | 540,920 | |||||||
Net premiums earned | $ | 200,840 | $ | 324,926 | $ | 6,130 | $ | 531,896 | ||||||||
Other insurance revenue | 2,842 | — | — | 2,842 | ||||||||||||
Net loss and loss adjustment expenses | (136,208 | ) | (210,680 | ) | (4,269 | ) | (351,157 | ) | ||||||||
Commission and other acquisition expenses | (56,919 | ) | (98,510 | ) | (1,973 | ) | (157,402 | ) | ||||||||
General and administrative expenses | (10,405 | ) | (514 | ) | (188 | ) | (11,107 | ) | ||||||||
Underwriting income (loss) | $ | 150 | $ | 15,222 | $ | (300 | ) | $ | 15,072 | |||||||
Reconciliation to net income | ||||||||||||||||
Net investment income and realized gains on investment | 28,684 | |||||||||||||||
Amortization of intangible assets | (819 | ) | ||||||||||||||
Foreign exchange and other gains | 934 | |||||||||||||||
Interest and amortization expenses | (7,172 | ) | ||||||||||||||
Other general and administrative expenses | (4,289 | ) | ||||||||||||||
Income tax expense | (495 | ) | ||||||||||||||
Net income | $ | 31,915 | ||||||||||||||
Net loss and loss adjustment expense ratio* | 66.9 | % | 64.8 | % | 69.6 | % | 65.7 | % | ||||||||
Commission and other acquisition expense ratio** | 27.9 | % | 30.3 | % | 32.2 | % | 29.4 | % | ||||||||
General and administrative expense ratio*** | 5.1 | % | 0.2 | % | 3.1 | % | 2.9 | % | ||||||||
Combined ratio**** | 99.9 | % | 95.3 | % | 104.9 | % | 98.0 | % |
11
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)
3. Segment Reporting (continued)
For the Three Months Ended June 30, 2013 | Diversified Reinsurance | AmTrust Quota Share Reinsurance | NGHC Quota Share | Total | ||||||||||||
Net premiums written | $ | 134,934 | $ | 290,578 | $ | 72,437 | $ | 497,949 | ||||||||
Net premiums earned | $ | 178,336 | $ | 261,404 | $ | 73,533 | $ | 513,273 | ||||||||
Other insurance revenue | 2,780 | — | — | 2,780 | ||||||||||||
Net loss and loss adjustment expenses | (120,837 | ) | (172,925 | ) | (49,585 | ) | (343,347 | ) | ||||||||
Commission and other acquisition expenses | (44,438 | ) | (76,198 | ) | (22,936 | ) | (143,572 | ) | ||||||||
General and administrative expenses | (11,153 | ) | (505 | ) | (179 | ) | (11,837 | ) | ||||||||
Underwriting income | $ | 4,688 | $ | 11,776 | $ | 833 | $ | 17,297 | ||||||||
Reconciliation to net income | ||||||||||||||||
Net investment income and realized losses on investment | 20,692 | |||||||||||||||
Amortization of intangible assets | (945 | ) | ||||||||||||||
Foreign exchange and other gains | 1,049 | |||||||||||||||
Interest and amortization expenses | (9,570 | ) | ||||||||||||||
Other general and administrative expenses | (4,980 | ) | ||||||||||||||
Income tax expense | (212 | ) | ||||||||||||||
Net income | $ | 23,331 | ||||||||||||||
Net loss and loss adjustment expense ratio* | 66.7 | % | 66.2 | % | 67.4 | % | 66.5 | % | ||||||||
Commission and other acquisition expense ratio** | 24.5 | % | 29.1 | % | 31.2 | % | 27.8 | % | ||||||||
General and administrative expense ratio*** | 6.2 | % | 0.2 | % | 0.3 | % | 3.3 | % | ||||||||
Combined ratio**** | 97.4 | % | 95.5 | % | 98.9 | % | 97.6 | % |
12
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)
3. Segment Reporting (continued)
For the Six Months Ended June 30, 2014 | Diversified Reinsurance | AmTrust Quota Share Reinsurance | NGHC Quota Share | Total | ||||||||||||
Net premiums written | $ | 460,562 | $ | 791,034 | $ | (784 | ) | $ | 1,250,812 | |||||||
Net premiums earned | $ | 400,156 | $ | 629,848 | $ | 21,122 | $ | 1,051,126 | ||||||||
Other insurance revenue | 8,004 | — | — | 8,004 | ||||||||||||
Net loss and loss adjustment expenses | (277,572 | ) | (410,224 | ) | (14,705 | ) | (702,501 | ) | ||||||||
Commission and other acquisition expenses | (107,760 | ) | (188,995 | ) | (6,729 | ) | (303,484 | ) | ||||||||
General and administrative expenses | (21,395 | ) | (1,062 | ) | (387 | ) | (22,844 | ) | ||||||||
Underwriting income (loss) | $ | 1,433 | $ | 29,567 | $ | (699 | ) | $ | 30,301 | |||||||
Reconciliation to net income | ||||||||||||||||
Net investment income and realized gains on investment | 56,614 | |||||||||||||||
Amortization of intangible assets | (1,638 | ) | ||||||||||||||
Foreign exchange and other gains | 1,072 | |||||||||||||||
Interest and amortization expenses | (15,236 | ) | ||||||||||||||
Accelerated amortization of junior subordinated debt discount and issuance costs | (28,240 | ) | ||||||||||||||
Other general and administrative expenses | (7,476 | ) | ||||||||||||||
Income tax expense | (1,421 | ) | ||||||||||||||
Net income | $ | 33,976 | ||||||||||||||
Net loss and loss adjustment expense ratio* | 68.0 | % | 65.1 | % | 69.6 | % | 66.3 | % | ||||||||
Commission and other acquisition expense ratio** | 26.4 | % | 30.0 | % | 31.9 | % | 28.7 | % | ||||||||
General and administrative expense ratio*** | 5.2 | % | 0.2 | % | 1.8 | % | 2.8 | % | ||||||||
Combined ratio**** | 99.6 | % | 95.3 | % | 103.3 | % | 97.8 | % |
13
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)
3. Segment Reporting (continued)
For the Six Months Ended June 30, 2013 | Diversified Reinsurance | AmTrust Quota Share Reinsurance | NGHC Quota Share | Total | ||||||||||||
Net premiums written | $ | 402,544 | $ | 635,396 | $ | 149,068 | $ | 1,187,008 | ||||||||
Net premiums earned | $ | 374,585 | $ | 481,692 | $ | 145,438 | $ | 1,001,715 | ||||||||
Other insurance revenue | 7,995 | — | — | 7,995 | ||||||||||||
Net loss and loss adjustment expenses | (261,600 | ) | (318,570 | ) | (98,072 | ) | (678,242 | ) | ||||||||
Commission and other acquisition expenses | (89,220 | ) | (141,330 | ) | (45,352 | ) | (275,902 | ) | ||||||||
General and administrative expenses | (21,951 | ) | (994 | ) | (353 | ) | (23,298 | ) | ||||||||
Underwriting income | $ | 9,809 | $ | 20,798 | $ | 1,661 | $ | 32,268 | ||||||||
Reconciliation to net income | ||||||||||||||||
Net investment income and realized gains on investment | 45,954 | |||||||||||||||
Amortization of intangible assets | (1,890 | ) | ||||||||||||||
Foreign exchange and other gains | 2,596 | |||||||||||||||
Interest and amortization expenses | (19,140 | ) | ||||||||||||||
Other general and administrative expenses | (7,614 | ) | ||||||||||||||
Income tax expense | (736 | ) | ||||||||||||||
Net income | $ | 51,438 | ||||||||||||||
Net loss and loss adjustment expense ratio* | 68.4 | % | 66.1 | % | 67.4 | % | 67.2 | % | ||||||||
Commission and other acquisition expense ratio** | 23.3 | % | 29.3 | % | 31.2 | % | 27.3 | % | ||||||||
General and administrative expense ratio*** | 5.7 | % | 0.3 | % | 0.3 | % | 3.1 | % | ||||||||
Combined ratio**** | 97.4 | % | 95.7 | % | 98.9 | % | 97.6 | % |
* | Calculated by dividing net loss and loss adjustment expenses by the sum of net premiums earned and other insurance revenue. |
** | Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue. |
*** | Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue. |
**** | Calculated by adding together net loss and loss adjustment expense ratio, commission and other acquisition expense ratio and general and administrative expense ratio. |
14
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)
3. Segment Reporting (continued)
The following table summarizes our reportable segments' identifiable assets as of June 30, 2014 and December 31, 2013:
June 30, 2014 | Diversified Reinsurance | AmTrust Quota Share Reinsurance | NGHC Quota Share | Total | ||||||||||||
Reinsurance balances receivable, net | $ | 301,165 | $ | 371,361 | $ | — | $ | 672,526 | ||||||||
Prepaid reinsurance premiums | 29,378 | — | — | 29,378 | ||||||||||||
Reinsurance recoverable on unpaid losses | 100,199 | — | — | 100,199 | ||||||||||||
Deferred commission and other acquisition expenses | 99,004 | 261,060 | 115 | 360,179 | ||||||||||||
Loan to related party | — | 167,975 | — | 167,975 | ||||||||||||
Goodwill and intangible assets, net | 88,975 | — | — | 88,975 | ||||||||||||
Restricted cash and cash equivalents and investments | 1,091,474 | 1,334,771 | 85,315 | 2,511,560 | ||||||||||||
Other assets | 28,764 | — | — | 28,764 | ||||||||||||
Total assets - reportable segments | 1,738,959 | 2,135,167 | 85,430 | 3,959,556 | ||||||||||||
Corporate assets | — | — | — | 1,061,250 | ||||||||||||
Total Assets | $ | 1,738,959 | $ | 2,135,167 | $ | 85,430 | $ | 5,020,806 |
December 31, 2013 | Diversified Reinsurance | AmTrust Quota Share Reinsurance | NGHC Quota Share | Total | ||||||||||||
Reinsurance balances receivable, net | $ | 260,882 | $ | 278,573 | $ | 20,690 | $ | 560,145 | ||||||||
Prepaid reinsurance premiums | 39,186 | — | — | 39,186 | ||||||||||||
Reinsurance recoverable on unpaid losses | 84,036 | — | — | 84,036 | ||||||||||||
Deferred commission and other acquisition expenses | 88,482 | 209,439 | 6,987 | 304,908 | ||||||||||||
Loan to related party | — | 167,975 | — | 167,975 | ||||||||||||
Goodwill and intangible assets, net | 90,613 | — | — | 90,613 | ||||||||||||
Restricted cash and cash equivalents and investments | 1,029,537 | 1,098,409 | 103,752 | 2,231,698 | ||||||||||||
Other assets | 32,358 | — | — | 32,358 | ||||||||||||
Total assets - reportable segments | 1,625,094 | 1,754,396 | 131,429 | 3,510,919 | ||||||||||||
Corporate assets | — | — | — | 1,202,460 | ||||||||||||
Total Assets | $ | 1,625,094 | $ | 1,754,396 | $ | 131,429 | $ | 4,713,379 |
15
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)
3. Segment Reporting (continued)
The following tables set forth financial information relating to net premiums written and earned by major line of business and reportable segment for the three and six months ended June 30, 2014 and 2013:
For the Three Months Ended June 30, | 2014 | 2013 | ||||||||||||
Net premiums written | Total | % of Total | Total | % of Total | ||||||||||
Diversified Reinsurance | ||||||||||||||
Property | $ | 25,556 | 4.7 | % | $ | 16,556 | 3.3 | % | ||||||
Casualty | 107,827 | 19.9 | % | 88,793 | 17.8 | % | ||||||||
Accident and Health | 7,895 | 1.5 | % | 7,080 | 1.4 | % | ||||||||
International | 27,665 | 5.1 | % | 22,505 | 4.5 | % | ||||||||
Total Diversified Reinsurance | 168,943 | 31.2 | % | 134,934 | 27.0 | % | ||||||||
AmTrust Quota Share Reinsurance | ||||||||||||||
Small Commercial Business | 198,023 | 36.6 | % | 136,208 | 27.4 | % | ||||||||
Specialty Program | 56,329 | 10.4 | % | 38,669 | 7.8 | % | ||||||||
Specialty Risk and Extended Warranty | 117,672 | 21.8 | % | 115,701 | 23.2 | % | ||||||||
Total AmTrust Quota Share Reinsurance | 372,024 | 68.8 | % | 290,578 | 58.4 | % | ||||||||
NGHC Quota Share | ||||||||||||||
Automobile Liability | 9 | — | % | 41,585 | 8.4 | % | ||||||||
Automobile Physical Damage | (56 | ) | — | % | 30,852 | 6.2 | % | |||||||
Total NGHC Quota Share | (47 | ) | — | % | 72,437 | 14.6 | % | |||||||
$ | 540,920 | 100.0 | % | $ | 497,949 | 100.0 | % |
For the Three Months Ended June 30, | 2014 | 2013 | ||||||||||||
Net premiums earned | Total | % of Total | Total | % of Total | ||||||||||
Diversified Reinsurance | ||||||||||||||
Property | $ | 40,760 | 7.7 | % | $ | 27,771 | 5.4 | % | ||||||
Casualty | 125,385 | 23.6 | % | 116,838 | 22.8 | % | ||||||||
Accident and Health | 11,374 | 2.1 | % | 9,729 | 1.9 | % | ||||||||
International | 23,321 | 4.4 | % | 23,998 | 4.7 | % | ||||||||
Total Diversified Reinsurance | 200,840 | 37.8 | % | 178,336 | 34.8 | % | ||||||||
AmTrust Quota Share Reinsurance | ||||||||||||||
Small Commercial Business | 177,054 | 33.3 | % | 117,566 | 22.9 | % | ||||||||
Specialty Program | 44,952 | 8.5 | % | 32,115 | 6.2 | % | ||||||||
Specialty Risk and Extended Warranty | 102,920 | 19.3 | % | 111,723 | 21.8 | % | ||||||||
Total AmTrust Quota Share Reinsurance | 324,926 | 61.1 | % | 261,404 | 50.9 | % | ||||||||
NGHC Quota Share | ||||||||||||||
Automobile Liability | 3,892 | 0.7 | % | 42,473 | 8.3 | % | ||||||||
Automobile Physical Damage | 2,238 | 0.4 | % | 31,060 | 6.0 | % | ||||||||
Total NGHC Quota Share | 6,130 | 1.1 | % | 73,533 | 14.3 | % | ||||||||
$ | 531,896 | 100.0 | % | $ | 513,273 | 100.0 | % |
16
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)
3. Segment Reporting (continued)
For the Six Months Ended June 30, | 2014 | 2013 | ||||||||||||
Net premiums written | Total | % of Total | Total | % of Total | ||||||||||
Diversified Reinsurance | ||||||||||||||
Property | $ | 88,137 | 7.0 | % | $ | 86,078 | 7.3 | % | ||||||
Casualty | 279,581 | 22.4 | % | 237,216 | 20.0 | % | ||||||||
Accident and Health | 25,117 | 2.0 | % | 22,609 | 1.8 | % | ||||||||
International | 67,727 | 5.4 | % | 56,641 | 4.8 | % | ||||||||
Total Diversified Reinsurance | 460,562 | 36.8 | % | 402,544 | 33.9 | % | ||||||||
AmTrust Quota Share Reinsurance | ||||||||||||||
Small Commercial Business | 451,780 | 36.1 | % | 298,226 | 25.1 | % | ||||||||
Specialty Program | 88,127 | 7.0 | % | 73,615 | 6.2 | % | ||||||||
Specialty Risk and Extended Warranty | 251,127 | 20.1 | % | 263,555 | 22.2 | % | ||||||||
Total AmTrust Quota Share Reinsurance | 791,034 | 63.2 | % | 635,396 | 53.5 | % | ||||||||
NGHC Quota Share | ||||||||||||||
Automobile Liability | (525 | ) | — | % | 85,924 | 7.2 | % | |||||||
Automobile Physical Damage | (259 | ) | — | % | 63,144 | 5.4 | % | |||||||
Total NGHC Quota Share | (784 | ) | — | % | 149,068 | 12.6 | % | |||||||
$ | 1,250,812 | 100.0 | % | $ | 1,187,008 | 100.0 | % |
For the Six Months Ended June 30, | 2014 | 2013 | ||||||||||||
Net premiums earned | Total | % of Total | Total | % of Total | ||||||||||
Diversified Reinsurance | ||||||||||||||
Property | $ | 81,355 | 7.8 | % | $ | 75,318 | 7.5 | % | ||||||
Casualty | 247,272 | 23.5 | % | 233,897 | 23.4 | % | ||||||||
Accident and Health | 20,260 | 1.9 | % | 18,362 | 1.8 | % | ||||||||
International | 51,269 | 4.9 | % | 47,008 | 4.7 | % | ||||||||
Total Diversified Reinsurance | 400,156 | 38.1 | % | 374,585 | 37.4 | % | ||||||||
AmTrust Quota Share Reinsurance | ||||||||||||||
Small Commercial Business | 335,659 | 31.9 | % | 219,823 | 22.0 | % | ||||||||
Specialty Program | 77,805 | 7.4 | % | 65,461 | 6.5 | % | ||||||||
Specialty Risk and Extended Warranty | 216,384 | 20.6 | % | 196,408 | 19.6 | % | ||||||||
Total AmTrust Quota Share Reinsurance | 629,848 | 59.9 | % | 481,692 | 48.1 | % | ||||||||
NGHC Quota Share | ||||||||||||||
Automobile Liability | 12,988 | 1.2 | % | 84,103 | 8.4 | % | ||||||||
Automobile Physical Damage | 8,134 | 0.8 | % | 61,335 | 6.1 | % | ||||||||
Total NGHC Quota Share | 21,122 | 2.0 | % | 145,438 | 14.5 | % | ||||||||
$ | 1,051,126 | 100.0 | % | $ | 1,001,715 | 100.0 | % |
17
MAIDEN HOLDINGS, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands of U.S. dollars, except share and per share data)
4. Investments
(a) Fixed Maturities and Other Investments
The original or amortized cost, estimated fair value and gross unrealized gains and losses of available-for-sale fixed maturities and other investments as of June 30, 2014 and December 31, 2013 are as follows:
June 30, 2014 | Original or amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||
Available-for-sale fixed maturities: | ||||||||||||||||
U.S. treasury bonds | $ | 11,956 | $ | 505 | $ | — | $ | 12,461 | ||||||||
U.S. agency bonds – mortgage-backed | 1,215,829 | 15,959 | (19,202 | ) | 1,212,586 | |||||||||||
U.S. agency bonds – other | 7,209 | 965 | — | 8,174 | ||||||||||||
Non-U.S. government bonds | 65,755 | 3,818 | (15 | ) | 69,558 | |||||||||||
Other mortgage-backed securities | 43,925 | 1,623 | — | 45,548 | ||||||||||||
Corporate bonds | 1,692,907 | 123,494 | (4,564 | ) | 1,811,837 | |||||||||||
Municipal bonds – other | 62,142 | 3,370 | — | 65,512 | ||||||||||||
Total available-for-sale fixed maturities | 3,099,723 | 149,734 | (23,781 | ) | 3,225,676 | |||||||||||
Other investments | 10,438 | 623 | — | 11,061 | ||||||||||||
Total investments | $ | 3,110,161 | $ | 150,357 | $ | (23,781 | ) | $ | 3,236,737 |
December 31, 2013 | Original or amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||
Available-for-sale fixed maturities: | ||||||||||||||||
U.S. treasury bonds | $ | 16,622 | $ | 587 | $ | — | $ | 17,209 | ||||||||
U.S. agency bonds – mortgage-backed | 1,292,032 | 11,727 | (41,104 | ) | 1,262,655 | |||||||||||
U.S. agency bonds – other | 7,207 | 901 | — | 8,108 | ||||||||||||
Non-U.S. government bonds | 70,377 | 3,547 | (712 | ) | 73,212 | |||||||||||
Other mortgage-backed securities | 33,676 |